State balks at D&L liquidation plan

D&L Energy has asked a federal bankruptcy court to schedule an auction next month to sell the company’s assets but state regulators partially objected to on Friday

Staff report

youngstown

D&L Energy has asked a federal bankruptcy court to schedule an auction next month to sell the company’s remaining assets and liquidate — a motion state regulators partially objected to Friday.

The company first filed for Chapter 11 bankruptcy protection in April, citing the high costs of cleanup related to a Jan. 31 dumping incident, in which its owner, Ben W. Lupo, was charged with violating the Clean Water Act.

Lupo reportedly ordered an employee to dump tens of thousands of gallons of oilfield waste down a storm-drain at D&L headquarters on Salt Springs Road.

Both the company and Lupo since have been embroiled in a series of court battles and standoffs with state regulators who revoked D&L’s operating permits in February.

The company remains on the hook for costs associated with the cleanup, which lasted more than a week along the banks of the Mahoning River. Without the ability to conduct substantial business, D&L asked the U.S. Bankruptcy Court in Youngstown on Sept. 18 to schedule an auction next month.

But both the Ohio Department of Natural Resources and the Ohio Environmental Protection Agency objected Friday to a sale of assets that are “free and clear of liens, claims, interests and encumbrances,” as D&L had asked.

In an objection filed on behalf of state regulators, Ohio Attorney General Mike DeWine said D&L should not be allowed to walk away from its environmental liabilities at the site where the dumping occurred. The state fears it will be liable for other sites the company owns across the state.

Separately, the company continues to fight for reinstatement of its operating permits in Franklin County Common Pleas Court after the Ohio Oil and Gas Commission upheld the decision on appeal.

It also has been shopping the company to potential buyers across the country with some parties expressing an interest, according to court documents.